PRECIOUS-Gold dips, but still on track for 4th weekly rise on dovish Fed

PRECIOUS-Gold dips, but still on track for 4th weekly rise on dovish Fed

* Dollar headed for a weekly rise

* Palladium eyes first weekly decline in four

* SPDR Gold Trust Holdings at two-month low (Updates prices)

July 16 (Reuters) – Gold prices slipped on Friday due a slight rebound in U.S. bond yields and a stronger dollar, although a dovish stance on monetary policy by the Federal Reserve kept bullion on track for its fourth straight weekly rise.

Spot gold was down 0.5% at $1,819.46 per ounce by 1101 GMT, but was up 0.7% so far this week.

U.S. gold futures fell 0.5% to $1,819.70 per ounce.

“We are back again at $1,820 threshold and are seeing a lack of buying interest from ETF investors. Also, today bond yields are slightly up and dollar is rather steady,” said Commerzbank analyst Carsten Fritsch.

However, the view that Fed will not react to this strong rise in inflation is keeping gold prices above $1,800, he added.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.3% to 1,034.37 tonnes on Wednesday, its lowest in nearly two months.

Benchmark U.S. 10-year Treasury yields edged up to 1.3305% after falling to a one-week low of 1.2920% in the previous session. The dollar index was headed for a strong weekly gain. [US/

This week, Fed Chair Jerome Powell reiterated that rising inflation is likely to be transitory and the U.S. central bank would continue to support the economy, which sent gold prices to a one-month high on Thursday.

Some investors view gold as a hedge against higher inflation that could follow stimulus measures and it also tends to gain when interest rates are low.

If gold closes the week well above $1,800, it would be bullish catalyst for gold in the near-term, said Vincent Tie, sales manager at Singapore dealer, Silver Bullion.

Elsewhere, silver fell 0.9% to $26.09 per ounce, while platinum lost 0.9% to $1,128.52.

Palladium dropped 1.3% to $2,696.01 per ounce and was headed for its first weekly decline in four. (Reporting by Brijesh Patel in Bengaluru; editing by David Evans)

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